One 77-year-old’s search for the truth: 9/11, election fraud, illegal wars, Wall Street criminality, a stolen nuke, the neocon wars, control of the U.S. government by global corporations, the unjustified assault on Social Security, media complicity, and the "Great Recession" about to become the second Great Depression. "The most important truths are hidden from us by the powerful few who strive to steal the American dream by keeping We the People in the dark."

Like autumn leaves on a tree, they wait for a stiff wind and a cold frost.

This week, the Fed is scheduled to make a weather forecast.

Bloomberg
reports that only two of the Fed’s 23 “primary dealers” – banks that
buy bonds directly from the government – expect a rate hike decision
tomorrow when the Fed meets.

“Tall Paul”

Of course, anything is possible.

But the Fed’s position is clear: It may raise rates tomorrow, or it may not.

It hardly matters. Either way, it will not – it cannot – stick with a
credit-tightening cycle in the face of the inevitable selloff on Wall
Street and the recession on Main Street.

The days of former Fed chief “Tall Paul” Volcker are over.

Back when Volcker took over the Fed in 1979, the economy could still survive
a hard freeze. The new debt-based money had not yet done its mischief.

In 1980, Volcker’s first full year as Fed chief, U.S. national debt was
below $1 trillion (now it is more than $19 trillion). If you wanted to
buy a house, you had to pay 12% interest on your mortgage. And the stock
market had been drifting down for the previous 14 years and trading at
valuations not seen since the 1930s.

And with consumer prices rising at a nearly 14% annual rate, Volcker had to do something.

Unlike his ultimate successor Janet Yellen, he did not announce a wimpy
program of rate hikes – one-quarter of a percentage point every three
months – and then not do it.

Instead, he boosted short-term interest rates from 11% to a peak of 20% in June of 1981.

Monetary Winter

A frost? Volcker brought on a blizzard.

And the politicians wanted his head for it.

A group of eminent economists demanded he be removed from office. An effigy of him was burned on the Capitol steps.

But
Volcker’s program stuck. And it worked. Two years later, consumer price
inflation was running at just 3% a year. Volcker could lower interest
rates. The economy boomed.

Today,
no one is concerned about inflation. U.S. stocks are near an all-time
high. And mortgage rates are at all-time lows. The prime rate – the
benchmark rate for mortgage lending – is at 3.5%, a long way from its
high of 21.5% in 1981.

Of course, the weather changes without anyone’s say-so. And so, ultimately, do markets.

In
1980, for example, share prices were so cheap that you could buy all
the stocks on the Dow with one ounce of gold. Today, stock prices are so
high, that you would need 14 ounces of gold to buy all the Dow stocks.

Simple Model

We once proposed a simple trading model…

When
the Dow is worth less than 5 ounces of gold, buy stocks and sell gold.
When the Dow is worth more than 10 ounces of gold, sell stocks and buy
gold.

When
the Dow is worth less than 5 ounces of gold, buy stocks and sell gold.
When the Dow is worth more than 10 ounces of gold, sell stocks and buy
gold.The quantity of gold
increases, but only about as fast as the quantity of goods and services
that it can buy.

Stocks
represent real wealth, too. It makes sense, at least to us, that there
should be a more-or-less predictable relationship between real money and
the companies that produce real wealth.

Just eyeballing the chart below, we see stocks going up and down. But we see a pattern, too.

Had
you stuck with our trading model, rigidly, over the last century, you
would have had five opportunities to double your money.

You
could have turned 10 ounces of gold – worth about $180 in 1917 money –
into 320 ounces, worth over $400,000 in today’s dollars.

Assuming the dollar lost 95% of its buying power, that represents a real gain of about 1,000%.

Myth disposal is dangerous work: People love their myths more than they love life itself.

They may kill for money. But they die for their religions, their governments, their clans… and their ideas.

Great Cause

Some people think that even an idea as abstract as “freedom of speech” is worth dying for.

It was Voltaire who said: “I disapprove of what you say, but I will defend to the death your right to say it.”

Most
people jump onboard the train of a Great Cause with enthusiasm and
conviction. But many have the good sense to hop off quietly before their
lives are in real danger.

We suspect that Mr. Voltaire would have done the same.

That’s
why the deadliest myths are those that you can ride along with at no
personal risk. Foreign wars, for example, are always a favorite.

When
Pericles proclaimed that the honor of Athens was at stake, and that it
must take up the imperial burden and continue its war with Sparta, he
was not offering to invade Sicily himself.

Nor was George W. Bush, in announcing his War on Terror, suggesting that he would personally march into Mosul.

But when you act on a myth, you are soon hostage to it; if you cannot win, you will lose.

As it happened, Pericles died in his bed; Athens was destroyed; its population was either killed or enslaved.

The
War on Terror, meanwhile, has cost about $3.6 trillion so far
(according to the latest estimates from Brown University), and has left
more than 7,000 U.S. soldiers dead.

But George Bush, Dick Cheney, Michael Ledeen, Elliott Abrams, Paul Wolfowitz, and John Bolton are still alive.

In
fact, as far as we know, not a single one of those killed was a leading
proponent of the war. Anywhere between 60,000 and 1.2 million people
died on the other side (so many… and so difficult to verify… a whole
industry has arisen trying to count them all).

Saddam
Hussein, who had kept a lid on Islamic terrorism, was executed. Now
there is a terrorist government in the area – ISIS – with U.S.-made
weapons and a U.S.-trained head-of-state.

Recession Warning

But
today we turn back to the world of money (pausing only to wonder if
$3.6 trillion would have been squandered so readily had it been real
money).

Markets are rousing from their summer sleep. We need to pay attention.

Here’s the situation:

The
U.S. economy is still growing. But barely. And the pattern is clear.
Instead of gathering strength, it is weakening… with lower GDP growth,
quarter after quarter.

“Nominal” GDP growth is now 2.4% – the lowest rate, outside of recession, since World War II.

To get “real” GDP growth, you need to subtract inflation (the GDP
deflator)... which, according to one official measurement, is 2.2%, not
including food and energy. If those numbers were correct, it would mean
the U.S. economy is essentially stagnant. Dead in the water.

Most likely, official inflation is understated.

President Reagan’s budget advisor, David Stockman, recalculates, taking out much
of the statistical hocus-pocus from the feds’ numbers. He figures the
real rate of price increases that most Americans suffer – his “Flyover
CPI” – has been averaging 3.3% for this entire century.

Using that number, we see the real economy is now in recession, with a growth rate of MINUS 0.9%.

Most likely, the downward drift of output will continue. If so, you should expect an official recession before the end of 2017.

And
most likely, that will sooner or later lead to a sudden sell-off in the
stock market, when the myth of “recovery” finally dies.

This will lead to more intervention – “Drone Money” – from the feds… and to higher rates of consumer price inflation.

Inflation Threat

But wait… Inflation is already stalking the whole capital structure.

Bonds, for example, now depend on low rates of consumer price inflation… as far as the eye can see.

That’s because bond prices fall when interest rates rise. And interest rates rise along with inflation.

At today’s ultra-low yields, even a small uptick in interest rates will wallop bondholders.

That’s why investors pay such close attention to the Fed’s hints and teases.
They know that today’s elevated bond prices depend on the lowest rates
in 5,000 years.

If the rate of annual CPI growth is 3.3%, as Stockman calculates, and you
have put your money into U.S. 10-year Treasuries yielding 1.5%, you are
losing 1.8% a year in terms of purchasing power.

And if your money is in stocks paying a 2% dividend, you are losing 1.3% a
year (more than that when you include taxes) in purchasing power.

Cockamamie Myth

In today’s markets, with such low yields everywhere, almost everyone must be losing money!

Let consumer price inflation move up just a little, and you will see a mass flight from both stocks and bonds.

It may have already begun. Since the middle of July, U.S. stocks have been
bouncing up and down… with no clear trend, higher or lower.

But look at what has happened to the bond market. Ambrose Evans Pritchard, in the Telegraph:

Yields
on 10-year Treasuries – the benchmark borrowing cost for international
finance – have jumped 19 basis points to 1.7% since the middle of last
week. [With bond yields rising, prices are falling.]

The amount of global government debt trading at rates below zero has
suddenly fallen from $10 trillion to $8.3 trillion, with parallel
effects for corporate bonds.

Investors,
businesses, and households are now hostage to their debts. Their debts
are hostage to interest rates. Interest rates are hostage to inflation.
And the Fed is hostage to its cockamamie myth: that it can control and
improve a market economy.

The Fed can mint new money to buy stocks and bonds… driving up asset
prices. But the more money it creates, the closer the day approaches
when consumer prices rise, too.

Labor Day
June , 2016 | Original Here | If you wish to receive his newsletter via email go to Original and sign up at bottom.

Paul Craig Roberts

Labor Day—what is it? Perhaps not many Americans any longer know, so here is my explanation.

In my time Labor Day was the unofficial end of summer, because school began after Labor Day.
Today school begins almost a month before. When I was in school that
would not have been possible, especially in the South. The schools were
not air-conditioned. If school had started in August no one would have
showed up. It was difficult enough getting through May before school
was out in June.

As most Americans probably thought of Labor Day as the last summer
holiday, now that Labor Day has lost that role, what is Labor Day? The
holiday originated as an apology capitalists tossed to labor to defuse a
standoff.

Workers understood that labor was the backbone of the economy, not
Wall Street moguls or bankers in their fine offices. Workers wanted a
holiday that recognized labor, thus elevating labor in public policy to a
standing with capital. Some states created labor day holidays, but it
wasn’t until 1894 that Labor Day was made a federal holiday.

Congress created the federal holiday in response to the murder of
strikers by US Army troops and federal marshalls during the Pullman
strike of 1894. The factory workers who built Pullman railway cars
lived in the company town of Pullman. George Pullman provoked a strike
by lowering wages but not the rents charged in the company town.

President Grover Cleveland relied on Attorney General Richard Olney
to restore capitalist control. Olney, a former railway attorney, sent
in the federal violence to break up the strike. Olney still received a
retainer from his railway company that was larger than his salary as US
Attorney General. So we know whose side he was on. The presstitute
media portrayed the beaten down strikers as unpatriotic foreigners, and
the strike leader, Eugene Debs, was sentenced to federal prison. The
experience radicalized Debs and turned him into a socialist.

The obvious injustice created more sympathy for labor than
capitalists could stomach, so Congress defused the situation by creating
Labor Day. President Cleveland washed his hands of the blood on them
by signing the legislation.

Officially what we are celebrating on the first Monday of September
is American labor, but what is really being celebrated is the success of
capitalists again flummoxing the people and avoiding a real social
revolution.

The labor movement, which gave us Labor Day, is no longer with us.
The American labor movement died about ten years after the death of its
most famous leader, George Meany of the AFL-CIO. Meany, born in 1894,
died in 1980.

I remember when labor was at the center of politics and policy. There
was even a field of economics called “labor economics.” The political
influence of labor ended with the offshoring of US industrial and
manufacturing jobs. For years US capitalists tried to avoid a fair
shake for labor by locating their facilities in Southern states that had
right to work laws. But with the collapse of the Soviet Union and the
change in attitude of India and China toward foreign capital,
capitalists learned that they could increase profits by using foreign
labor offshore to produce the goods and services that they sold to
Americans. The difference in labor costs flowed directly into profits,
executive bonuses, and shareholder capital gains.

Free market economists, who live in a make-believe world, pretend
that the lower labor costs flow into lower US consumer prices and that
consumers beneift despite the loss of well-paying jobs. The problem
with free market economics is that a priori reasoning takes precedence
over empirical fact. For free market economists, the way the world
should be prevails over the way that the world actually is.

As a consequence of jobs offshoring, industrial and manufacturing
cities became semi-ghost towns with declining populations. Municipal
and state governments, deprived of tax base, found themselves under
duress to make pension payments. To avoid immediate bankruptcy, cities
such as Chicago sold off public assets such as 75 years of parking meter
revenues for a one time payment.

The Democratic Party, which had been the countervailing power against
the Republican business party, was deprived of union funding as the
jobs that paid union dues were no longer in America. By moving
production offshore, capitalists turned the Democrats into a second
capitalist political party dependent on funding from the business
sector.

Today we have one party with two heads. The competition between the
parties is about which party gets to be the whore for the capitalists
for the next political term. As Democrats and Republicans swap the whore
function back and forth, neither party has an incentive to do anything
different.

The offshoring of high productivity, high value-added US jobs has
destroyed the labor movement. How much luck will labor leaders have
organizing people who hold part-time jobs as waitresses, bartenders,
hospital orderlies, and retail clerks? As I have pointed out for years
inmy reports on the monthly payroll jobs reports, the United States now
has the labor profile of a Third World country. The absence of jobs
that can support an independent existence and family life is the reason
that more Americans aged 24-34 live at home with parents than live
independently. The absence of jobs is the reason the labor force
participation rate has declined for years. The absence of jobs that pay
sufficiently to provide discretionary income is the reason the economy
cannot grow.

Looking at last Friday’s BLS payroll report, the jobs are in the
lowly paid, part-time service sector. The goods producing sector of the
economy lost 24,000 jobs. The jobs are in retail trade, health care and
social assistance, waitresses and bartenders, and government which is
tax supported employment.

Whether Washington policymakers realize it or not, the American work
force smells like India’s of a half centruy ago. Whatever deranged
Hillary and her neoconservatives claim, there is no evidence in the
compositon of the US labor force that the US is a superpower. Indeed,
what the employment statistics show is that the United States is a third
world country, a country whose leaders are so out of their minds that
they are picking fights with first world countries—Russia and China.

The United States of America is on its last legs. As there is no
willingness to recognize this, nothing can be done about it. America’s
last function is to cause World War 3 in which all of us will expire.

Colin Kaepernick Is Righter Than You Know: The National Anthem is a Celebration of Slavery

Before a preseason game
on Friday, San Francisco 49ers quarterback Colin Kaepernick refused to
stand for the playing of “The Star-Spangled Banner.” When he explained
why, he only spoke about the present: “I am not going to stand up to
show pride in a flag for a country that oppresses black people and
people of color. … There are bodies in the street and people getting
paid leave and getting away with murder.”

Twitter then went predictably nuts, with at least one 49ers fan burning Kaepernick’s jersey.Almost no one seems to be aware that even if the U.S. were a perfect
country today, it would be bizarre to expect African-American players to
stand for “The Star-Spangled Banner.” Why? Because it literally celebrates the murder of African-Americans.

Few people know this because we only ever sing the first verse. But read the end of the third verse and you’ll see why “The Star-Spangled Banner” is not just a musical atrocity, it’s an intellectual and moral one, too:

No refuge could save the hireling and slave
From the terror of flight or the gloom of the grave,
And the star-spangled banner in triumph doth wave
O’er the land of the free and the home of the brave.

“The Star-Spangled Banner,” Americans hazily remember, was written by
Francis Scott Key about the Battle of Fort McHenry in Baltimore during
the War of 1812. But we don’t ever talk about how the War of 1812 was a
war of aggression that began with an attempt by the U.S. to grab Canada
from the British Empire.

However, we’d wildly overestimated the strength of the U.S. military.
By the time of the Battle of Fort McHenry in 1814, the British had
counterattacked and overrun Washington, D.C., setting fire to the White
House.

And one of the key tactics behind the British military’s success was its active recruitment of American slaves. As a detailed 2014 article in Harper’s explains, the orders given to the Royal Navy’s Admiral Sir George Cockburn read:

Let the landings you make be more for the protection of
the desertion of the Black Population than with a view to any other
advantage. … The great point to be attained is the cordial Support of
the Black population. With them properly armed & backed with 20,000
British Troops, Mr. Madison will be hurled from his throne.

Whole families found their way to the ships of the British, who
accepted everyone and pledged no one would be given back to their
“owners.” Adult men were trained to create a regiment called
the Colonial Marines, who participated in many of the most important
battles, including the August 1814 raid on Washington.

Then on the night of September 13, 1814, the British bombarded Fort
McHenry. Key, seeing the fort’s flag the next morning, was inspired to
write the lyrics for “The Star-Spangled Banner.”

So when Key penned “No refuge could save the hireling and slave
/ From the terror of flight or the gloom of the grave,” he was taking
great satisfaction in the death of slaves who’d freed themselves. His
perspective may have been affected by the fact he owned several slaves
himself.

With that in mind, think again about the next two lines: “And the
star-spangled banner in triumph doth wave / O’er the land of the free
and the home of the brave.”The reality is that there were human beings fighting for
freedom with incredible bravery during the War of 1812. However, “The
Star-Spangled Banner” glorifies America’s “triumph” over them — and then
turns that reality completely upside down, transforming their killers
into the courageous freedom fighters.

After the U.S. and the British signed a peace treaty at the end of
1814, the U.S. government demanded the return of American “property,”
which by that point numbered about 6,000 people. The British refused.
Most of the 6,000 eventually settled in Canada, with some going to
Trinidad, where their descendants are still known as “Merikins.”Furthermore, if those leading the backlash against Kaepernick need
more inspiration, they can get it from Francis Scott Key’s later life.

By 1833, Key was a district attorney for Washington, D.C. As described in a book called Snowstorm in August by former Washington Post
reporter Jefferson Morley, the police were notorious
thieves, frequently stealing free blacks’ possessions with impunity. One
night, one of the constables tried to attack a woman who escaped and
ran away — until she fell off a bridge across the Potomac and drowned.

“There is neither mercy nor justice for colored people in this
district,” an abolitionist paper wrote. “No fuss or stir was made about
it. She was got out of the river, and was buried, and there the matter
ended.”

Key was furious and indicted the newspaper for intending “to injure,
oppress, aggrieve & vilify the good name, fame, credit &
reputation of the Magistrates & constables of Washington County.”

You can decide for yourself whether there’s some connection between
what happened 200 years ago and what Colin Kaepernick is angry about
today. Maybe it’s all ancient, meaningless history. Or maybe it’s
not, and Kaepernick is right, and we really need a new national anthem.

About Me

B.S. in Physics, Carnegie-Mellon University, 1960 Ph.D. in Physics, Brown University, 1966. Fellow, American Physical
Society. Fellow, American Association for the Advancement of Science.
Fellow, American Ceramic Society. Member, Geological Society of America, Research Physicist at Naval Research Laboratory (NRL), Washington, DC,
1967-2001. Fulbright-García Robles Fellow at Universidad Nacional
Autónoma de México, 1997. Invited Professor of Research at Universités
de Paris-6 & 7, Lyon-1, et St-Etienne (France) and Tokyo Institute
of Technology, 2000-2004. Adjunct Professor of Materials Science and
Engineering, University of Arizona, 2004-2005. Consultancy: impactGlass
research international, 2005-present.
Winner, one national and two international research awards and honored
by Brown University with a "Distinguished Graduate School Alumnus
Award." Author, 198 papers in peer-reviewed journals and books, Principal Author of 114 of these.